International copper prices are hovering at high levels

International copper prices are hovering at their highest levels, primarily due to anticipated increased demand in growth sectors such as artificial intelligence (AI) infrastructure and renewable energy. Against the backdrop of the ongoing power struggle between the US and China, both countries’ policies of strengthening reserves have become apparent. Coupled with forecasts that mine production has peaked, the prospect of future supply shortages is easily perceived.

The London Metal Exchange (LME) 3-month futures contract, an international benchmark, rose to $1322.5 per tonne on February 25, a 7% increase from the end of 2025. After hitting a record high of $14527.5 on January 29, although the rise has paused, it still reaches 1.7 times the average of the past 10 years ($7700).

Statistics from the International Copper Study Group (ICSG) show that there will be a surplus of approximately 380,000 tons of refined copper in 2025. Inventory levels in major markets such as the LME, the US, and Shanghai are also expected to reach their highest levels since 2003 by the end of January 2026. Despite the existing surplus, futures prices are still rising because the market anticipates a future supply shortage.

S&P Global Energy forecasts indicate that without new mine development and expansion of existing mines, mine production will peak at 27 million tons in 2030 before declining. On the other hand, demand is projected to increase by 50% by 2040, potentially creating a 10 million tonne supply gap.

International business consultant Hiroyuki Takai points out regarding copper prices that “demand from new industries that heavily utilize electrical wires is beginning to influence prices.” The surge in electricity consumption due to competition in AI development and the proliferation of related services makes strengthening power generation capacity and transmission and distribution networks a top priority. Furthermore, the data center construction boom continues. The increasing adoption of electric vehicles (EVs) and the trend towards stronger global defenses will also drive copper demand growth.

British research firm CRU predicts that demand from new industries will reach approximately 12.1 million tons by 2030, roughly 2.5 times the 2020 level, demonstrating that the expansion of demand from new industries is driving overall growth. Naohiro Shinmura, co-representative of the Japanese market risk advisory firm Market Risk Advisory, stated that among investors, driven by growth in demand for AI and other factors, “the trend of including copper in investment portfolios continues.”

Furthermore, a new “bullish factor” supporting copper prices has emerged: the trend of China and the United States classifying copper as a strategic resource and actively purchasing it. In 2025, the United States will add copper to its “Critical Minerals List.” In early February 2026, US President Trump announced a $12 billion investment to launch a critical mineral reserves program open to the private sector.

A report by Goldman Sachs on February 18 predicted that assuming 60 days of use of US reserves, 279,000 tons of copper would be needed. This would exceed LME copper inventories (approximately 250,000 tons).

Meanwhile, China is also strengthening its reserves. The China Nonferrous Metals Industry Association, a nonferrous metals industry group, stated in February that it will increase its strategic copper reserves and study the establishment of a commercial reserve system. Kazutoshi Nomura, a director at Mizuho Bank in Japan, stated, “The initiation of reserve purchases by the US and China is the main reason for the renewed recognition of the importance of copper, and many investors intend to buy in advance.” The prospect of other countries taking reserve actions under the influence of the US and China cannot be ruled out.

In a report on the 24th, Citigroup set its copper price forecast for the next three months at $14,000 per ton, higher than current levels. Strong buying interest during pullbacks and restocking after the Chinese Lunar New Year have kept prices high.

Goldman Sachs also pointed out that if strategic reserves are established globally, “the risk of price increases will rise significantly.” Currently, not only short-term speculative funds but also investment companies aiming for medium- to long-term holdings are attracting attention. Trading companies and other actual demanders are also expressing concerns about missing out. The widespread inflow of funds has kept prices high.